Sultan Resources Share Price Up, Eyes Off Gold in Elephant Country
The share price of gold explorer Sultan Resources Ltd [ASX:SLZ] has jumped significantly this morning on news of a newly defined gold target.
SLZ typically concentrated operations in Western Australia, but its share price really shifted gears when the company acquired tenements in NSW.
The company’s shares have risen nearly 200% over the past 12 months.
The SLZ share price took off in early May when SLZ announced it had acquired Colossus Metals and its suite of gold and copper exploration projects located in Central NSW.
At the time of writing, shares are up 10.35% or 1.5 cents to trade at 16 cents per share.
Lachlan Fold is elephant country
If you follow Aussie miners and explorers, you might have heard of the Lachlan Fold Belt.
I won’t blame you if you haven’t.
Despite hosting one of the country’s largest and lowest-cost gold mines, Newcrest Mining Ltd’s [ASX:NCM] Cadia mine, the area was thought to be depleted.
The bulk of exploration work carried out between 20 to 25 years ago failed to turn up any further large finds.
But as exploration techniques and technology develop (as demonstrated by the CSIRO last week), the chances of correctly identifying resources increases.
That’s why junior explorers have started turning up discoveries on ground that had previously been considered depleted.
SLZ has released a couple of announcements within the past few weeks regarding soil and rock sampling at its Lachlan Fold tenements.
In late May, SLZ announced high-grade gold and copper rock samples had helped define porphyry targets at the Big Hill project within the Lachlan Fold Belt.
This morning SLZ announced further results from soil and rock samples, this time at the Tucklan project, northeast of Big Hill.
However, initial results have returned far lower-grade gold mineralisation than what might have been hoped given the grades at Big Hill.
Both projects remain undrilled at this stage, meaning it is impossible to infer the size of the deposits at either site currently.
Don’t be fooled by the hype
We have recently covered RareX Ltd [ASX:REE] here at The Daily Reckoning Australia.
REE also operates within the Lachlan Fold Belt and its share price has seen similar returns to SLZ.
Some may be hoping REE could be on the verge of a discovery similar to Regis Resources Ltd’s [ASX:RRL] McPhillamys Gold project.
The project is expected to produce 250,000 ounces of gold per year.
Alkane Resources Ltd’s [ASX:ALK] Boda copper-gold porphyry discovery in September last year also contributed to the current interest in the area.
ALK technical director Ian Chalmers declared:
‘It is true elephant country … there has become the realisation that it is a tier 1 porphyry belt and it lies right here in New South Wales.’
Porphyry deposits are typically low-grade but are usually easy to mine.
They also require significant experience to successfully identify the resource.
While there is significant interest in these explorers because of the potential in the area, remember the types of deposits they are chasing are usually capital-intensive projects.
Exploration is expensive too, often requiring numerous deep, very expensive drill holes.
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